FCC vote on incentive auction plan could further open broadband competition

The U.S. Federal Communications Commission will reserve a significant amount of spectrum in its upcoming auctions of the television band for unlicensed uses such as Wi-Fi, agency officials said Friday.

The FCC will vote on a plan to conduct a complicated two-sided spectrum auction during its May 15 meeting, officials there said. The FCC will reserve approximately 18MHz to 26MHz of spectrum in the 600MHz band for unlicensed wireless uses, with the amount depending on how many TV stations participate in the auction, officials said.

The so-called incentive auction, in which U.S. television stations will be able to sell their spectrum in exchange for part of the profits of the auctions, will sell generic 5MHz blocks of spectrum in the 600MHz band to bidders, instead of selling specific spectrum bands, FCC officials said.

Participating TV stations will have the option of changing channels, sharing spectrum with other stations or discontinuing their over-the-air broadcasts. It's unclear how many stations will participate; trade group the National Association of Broadcasters has raised several concerns, including the possibility that many TV users would lose coverage.

The FCC is conducting the first two-sided spectrum auction worldwide, and it's important for the agency to make it work, Chairman Tom Wheeler wrote in a blog post Friday. The auction will be important for broadband competition in rural areas, he said.

"The incentive auction is a once-in-a-lifetime opportunity to expand the benefits of mobile wireless coverage and competition to consumers across the nation -- particularly consumers in rural areas -- offering more choices of wireless providers, lower prices, and higher quality mobile services," Wheeler wrote.

The 600MHz spectrum band is valuable spectrum for mobile broadband and related services. "Not all spectrum frequencies are created equal," Wheeler wrote. "Spectrum below 1GHz -- such as the incentive auction spectrum -- has physical properties that increase the reach of mobile networks over long distances. "

With the 600MHz spectrum, mobile providers will be able to build fewer base stations than in higher spectrum bands, an especially important feature of this spectrum for rural areas, Wheeler wrote.

Wheeler also criticized past spectrum assignments that left AT&T and Verizon Wireless with "the vast majority of low-band spectrum."

"As a result, rural consumers are denied the competition and choice that would be available if more wireless competitors also had access to low-band spectrum," he wrote.

The FCC is engaged now in a contentious debate about whether to limit how much spectrum any one carrier can buy in the incentive auction, with AT&T and Verizon arguing that spectrum limits would be unfair and would drive down bids.

The incentive auction is expected to happen in mid-2015. Part of the auction will be a reverse auction, during which TV stations will compete against each other to be paid for their spectrum. The reverse portion of the auction will determine the prices at which TV stations give up spectrum and the amount of spectrum available in the so-called forward auction, the FCC said.

The FCC's auction plan will focus on providing a "near nationwide" swath of spectrum to be sold in blocks and will attempt to work around spectrum shortages in markets with a lot of TV stations, officials said.

After the auction ends, participating TV stations will have 39 months to clear the sold spectrum, the FCC said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.

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